Zell’s Fundamentals (Sam-isms)

Feb 8, 2012 | Career, Entrepreneurship

Sam Zell is heralded as one of the most successful real estate professionals of his time. However, he doesn’t proclaim to have any complicated strategy when it comes to his deals. In fact, if you go to Equity Group Investments website you’ll find a page called ‘Zell’s Fundamentals’, a list of 13 brief statements which serve as the basis of his investment decisions.

Zell’s Fundamentals

Rule #1 – Operate on the condition of no surprises

Rule #2 -Everyday that you’re not selling an asset in your portfolio, you’re choosing to buy it

Rule #3 – Ensure management’s interests are aligned with shareholders

Rule #4 – Look for good companies with bad balance sheets

Rule #5 – Nothing should stand between a company and its fiduciary responsibility to shareholders

Rule #6 – Look for opportunities in markets with pent-up demand

Rule #7 – The definition of a partner is someone who shares your level of risk

Rule #8 – Liquidity = value

Rule #9 – Sentimentality about an investments leads to lack of discipline

Rule #10 – Take meaningful positions so you can influence your own destiny

Rule #11 – When everyone is going right, look left

Rule #12 – Understand the downside

Rule #13 It all comes down to Econ 101 – supply and demand

What’s on your list of fundamentals?